IN
THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN
OPERATIONS IN THE LUSTER FIELD, MORGAN COUNTY, COLORADO

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CAUSE
NO. 127

ORDER
NO. 127-2

REPORT OF THE
COMMISSION

This cause came on
for hearing before the Commission on August 9, 1960, at 10 a.m.., in Room 227
of the State Services Building, Denver, Colorado, after publication of Notice
of Hearing, as required by law, on the application of The Cramer Company,
Limited, and joined in by the Brinkerhoff Drilling Company, for an order
approving a certain Unit Agreement attached to said application as Exhibit II,
Luster Field "J" Sand Unit. Morgan County, Colorado, covering unit
operations in said Luster Field; and further approving a proposed water flood
protect for the "J" sand underlying said proposed Luster Field
"J" Sand Unit. Also, at the above hearing, on the Commission's own
motion, consideration was given to extension of the Luster Field, and deletion
of certain areas from the field, so as to have said Luster Field coincide which
proposed Luster Field "J" Sand Unit area.

FINDINGS

The Commission finds as follows:

1. That due
notice of the time, place and purpose of the hearing has been given in all
respects as required by law.

2. That the
Commission has jurisdiction over the subject matter embraced in said Notice,
and of the parties interested therein, and jurisdiction to promulgate the
hereinafter prescribed order.

3. That the
Commission by its Order No. 127-1, established field limits for the Luster
Field, and provided that subject field be produced in such a manner as would
best furnish information necessary to complete an engineering study to
determine the maximum efficient producing rate for the field, provided that
such production practices were conducted in a non-wasteful manner.

4. That the testimony
presented at the hearing indicates that the field limits of the Luster Field
should be revised to coincide with the proposed Luster Field "J" Sand
Unit, as presented by Applicant, by the extension of certain areas and the
deletion of certain other areas, as follows:

Area to be deleted

E½ of Section 33, Township 1 North [sic]
Range 55 West of the 6th P.M.

Area to be added

NW¼NE¼ of Section 34, Township 1 North,
Range 55 West of the 6th P.M.

5. That the
"J" sand formation underlying the Luster Field "J" Sand
Unit Area, defined herein, constitutes a common source of supply of oil and
gas; and that said Unit Area is composed of the following lands in Morgan
County, Colorado, to-wit:

Township 1 North, Range 55 West, 6th P.M.

Section 27:

S½

Section 34:

W½, NW¼NE¼

6. That the Unit
Agreement, as presented by Applicant, is necessary to increase the ultimate
recovery of oil and gas from said Unit Area, and should therefore be approved
as being in the public interest for conservation.

7. That the
water flood project for the "J" sand formation underlying said Luster
Field "J" Sand Unit Area, as presented by Applicant, will increase
the ultimate recovery of oil and gas from said Unit Area, and should therefore
be approved as being in the public interest for conservation.

8. That
avoidable waste of oil, and gas will be prevented by the operations proposed by
Applicant, and the correlative rights of all parties in the Luster Field
"J" Sand Unit Area, herein defined, will not be adversely affected
and will be reasonably protected under such plan of operation and that in the
interest of securing the greatest ultimate recovery of oil and gas from said
pool the prevention of waste and protection of correlative rights, this
application should be granted.

ORDER

NOW, THEREFORE, IT IS
ORDERED, that the following rules and regulations shall apply hereafter to the
lands set forth in this order in addition to other applicable rules and
regulations and orders of the Commission, if any, heretofore adopted and not in
conflict herewith:

Rule 1. The Luster Field
"J" Sand Unit Area, also known as the Luster Field, shall be composed
of the following lands in Morgan County, Colorado, to-wit:

South Half (S½) of
Section Twenty-seven (27), and West Half (W½) and Northwest Quarter of the
Northeast Quarter (NW¼ NE¼) of Section Thirty-four (34), Township One (1)
North, Range Fifty-five (55) West of the 6th P.M.

Rule 2. Said Unit
Agreement covering the Luster Field "J" Sand Unit Area herein
defined, and providing for unit operations of the "J" sand underlying
said Unit Area, is hereby approved.

Rule 3. The water flood [sic]
project for the "J" sand formation underlying the Luster Field
"J" Sand Unit Area, as presented by Applicant, is hereby approved,
and The Cramer Company, Limited, is authorized to inject water into said pool
through the proposed intake wells, as outlined in said application, in such
quantities as shall be reasonably determined by Applicant to best achieve the
maximum recovery of oil without waste.

IT IS FURTHER
ORDERED, that the Commission expressly reserves its right, after notice and
hearing, to alter, amend or repeal any and/or all of the above orders, rules
and regulations.